Part II - Chapter 8

1. Describe the risk resolution process goal. Why is each goal important? Define quantitative success criteria for each goal.

• a. Assign responsibility and authority to the lowest possible level. 15%
  • By assigning tasks at the lowest levels you get information from where the processes happen and you also get team buy-in.

• b. Follow a documented risk action plan. 10%
  • It is important to follow the risk play as closely as possible. The guide is designed to cover all of the various aspects and if is not followed you could possible miss important steps.

• c. Report results of risk resolution efforts. 15%
  • Documentation is important. Once a risk is identified and documented it can be referenced for future projects. By having it documented you can save time and money.

• d. Provide for risk aware decision making. 10%
  • Having decision makers as part of the risk management process you can better help the project. When a decision needs to be made, the personnel making it will have an idea of what the risk management situation is and decide appropriately.

• e. Determine the cost-effectiveness of risk management. 10%
  • Cost-effective risk management is not spending considerable hours determining solutions for every single risk identified. The time and effort should be focused on the critical elements and then a little less for each lower priority. Once you get to the low priority items don’t allocate as much time for these items.

• f. Is prepared to adapt to changing circumstances. 10%
  • You must be flexible and roll with the situation. Things change and you must be able to adjust to the changes.

• g. Take corrective action when necessary. 10%
  • When things are not going the way they were intended, you must step in and put things on the right course. This may involve changing or updating the plan.

• h. Improve communication within the team. 10%
  • By having progress meetings and talking individually with the team you show them that you are accessible and open to ideas. Having open communication with the team makes things run more smoothly.

• i. Systematically control software risk. 10%
  • Take each risk one at a time starting with the critical ones. By eliminating them systematically you may find patterns that can be useful to the entire project.

• Each goal has an impact on the entire project. These goals focus on the resolution of the risk. By assigning responsibility, following an action plan, being aware of the budget, and correct the issues that are identified.

2. Your requirements specification contains 100 requirements. The design phase began even though 20 percent of the requirements had TBDs (to be determined shall statements). The best-case outcome is that all your assumptions will be correct. Your training in risk management leads you to believe that about half of the TBDs are at risk. Calculate the cost of rework based on the assumption that half of the TBDs are at risk. What is the most likely outcome?

• If we use a basic formula of doubling the cost of the work and add an additional 15% it should cover the cost of any rework that this action would potentially cause. If we assume that each risk item is a $100 in cost then the total effort would cost $10,000. We assume that 10 items will have to be reworked so we want to take the $1,000 cost and double it. Then add an additional 15% which gives an increase of $2,300 to the project which is a 20% increase in the budget. It would be a costly outcome to have these requirements not fully defined before we move on to the next phase.

3. You identified an external system interface risk at a design review, and a technical interchange meeting was scheduled to resolve it. Ten people met for two hours before deciding on an agreeable resolution. Calculate the cost savings for preventing this problem, assuming that it would have been detected during system integration.

• This is a good example of problem prevention which occurs when you avoid problems, thereby eliminating their result: problem detection cost, rework cost, and opportunity cost. Because we define a problem as a risk occurrence, we must also consider the consequence of risk occurrence. Calculate problem prevention in terms of cost savings by summing the cost of detecting and fixing the problem, rework, opportunity cost, and consequence of risk occurrence.

4. What is the rational for assigning a risk action plan to the lowest possible level? What do you think would happen if the project manager was personally responsible for all the risks and their resolutions?

• A responsible person must be identified if the risk action plan will be assigned. Even if the plan is assigned to a group, there should be a group leader with clear authority to proceed. Factors such as availability and skill level help to determine who should be responsible for executing the risk action plan. The individual who identified the risk need not be the one responsible for resolving it. The idea that the person who finds it fixes it does not properly motivate risk identification, because (unlike corrective action) the fix is rarely easy. The risk action plan should be delegated to the lowest level possible, the most cost effective approach in terms of labor rates. It also provides individuals the experience that they need to increase their ability to manage risk.

• The major issue with having the project manager personally responsible for every risk would be counterproductive. They would spend all of their time dealing with the risk issues and not overseeing the entire project.

5. What are the two fundamental components of risk resolution? Why are they fundamental?

• The two fundamental components of risk resolution are creativity and collaboration. They are fundamental because creativity is inventiveness in originating ideas and collaboration is two or more individuals with complementary skills, interacting to create a shared understanding that none had previously possessed or could have come to on their own.

6. List five difficulties and five uncertainties that you have in your current assignment. Describe an opportunity that exists in each difficulty and uncertainty that you face. How could you exploit these opportunities?

• Five difficulties:
  • a. Very broad assignment: selected topics.
  • b. Book has questions that are not addressed in the reading.
  • c. Answers can be very detailed.
  • d. There is no specific project to reference or use as an example.
  • e. It is difficult to know if the answers to questions are correct or on the right path.

• Five uncertainties:
  • a. If enough material is covered for the assignment.
  • b. If the questions are answered correctly.
  • c. If I have an understanding the material.
  • d. If the answers are detailed enough.
  • e. How the final report will be presented.

• By doing all of the questions in the book, it should cover the depth of the material. Using past experience to help answer some of the questions.

7. Reporting risk status on a regular basis improves communication within the team. What are the problems that are possible in communication among team members?

• There are three problems that are possible in communication:

• a. Sending the wrong message. You can send the wrong message when written communication is ambiguous and when spoken communication us vague. Team communication is best when you check to verify the interpretation of the reader or listener.

• b. Receiving the wrong message. When you read between the line or do not listen to body language, you can receive the wrong message. Team communication can be improved if you repeat back what you thought you herd. The time spent clarifying written documentation and verbal questions will be small compared to the rework they might have otherwise cause.

• c. A break in the communication link. When you leave a voice-mail message, you cannot be sure that the other party received it. Team communication should ensure that what one group sent, the other received and understood.

8. What is your plan to sustain the risk management process once it is in place? Quantify the resources your plan will require. What mechanisms will provide a check and balance to perpetuate an effective process?

• Once the plan is in place use the corrective action procedure as a check and balance method. The corrective action procedure helps to correct for variations in the process or the product. The corrective action process has four steps:

• a. Identify the problem. Find the problem in the process or the product. The product can be intermediate work product, such as the risk action plan.

• b. Assess the problem. Perform an analysis to understand and evaluate the documented problem.

• c. Plan action. Approve a plan for action to solve the problem.

• d. Monitor progress. Track progress until the problem is solved. Record lessons learned for future reference.

9. How do you generate new ideas? What are the advantages of using the creative process to generate new ideas?

• The creative process is how we generate new ideas and is based on our preferences for thinking of new ideas. An innovation style is an approach to the creative process. Each of us has a unique innovation style profile that determines how we like to create. We can learn techniques to apply innovation styles to generate new ideas.

10. Do you agree that the mastery of risk is the foundation of modern life? Discuss why you do or do not agree.

• I do believe that mastery of risk is the foundation of modern life. The best lesions in life are learned through success and failure. When you learn from failure, you had to take a risk. The more times you take risk, the better you understand the possible outcomes. As each opportunity is explored and risk is taken the experienced person goes farther in the opportunity until a success is achieved. At this point you have made the right decisions of the risks you faced and thus mastered the risk of this particular opportunity. With out risk we would not be in the world we are in today.

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